Marston's (LSE:MARS) said on Tuesday that underlying profit before tax for the 52 weeks to 26 September is expected to come in above the top end of market expectations, marking a third consecutive year of significant profit growth.
The London-listed pub operator, which runs an estate of more than 1,300 sites, said profits are now more than three times the level of FY2023, when underlying profit before tax from continuing operations was £25.6m. Market forecasts for FY2026 had centred on underlying profit before tax of £78.4m, within a range of £76.1m to £83.2m, a figure Marston's confirmed it will now exceed.
Earnings (underlying EBITDA) margin rose by approximately 100 basis points over the year, which the company attributed to its pub operating model and cost discipline, building on the more than 200 basis points of margin expansion already delivered over the prior two years against the target set at its October 2024 Capital Markets Day.
Full-year like-for-like sales fell 1.2%, though the fourth quarter improved to broadly flat, helped by new pub formats, stronger summer trading and World Cup-related demand.
The Grandstand sports-focused format remained the standout performer, delivering returns on invested capital above 30% and sales growth of approximately 30% against pre-investment levels at FY2026 conversion sites.
Having completed 60 format conversions in FY2026, Marston's said it will deliver at least 100 in FY2027, concentrated on the Grandstand format, as the rollout scales into a bigger driver of group sales and profitability.
Recurring free cash flow generation supported further deleveraging, with net debt excluding IFRS 16 lease liabilities falling to approximately 4.2 times EBITDA, roughly half the level reported in FY2023.
The board intends to announce a programme of shareholder returns at its preliminary results, expected to take the form of share buybacks subject to market conditions.
"Our progress over the last three years shows the momentum we have as a high-margin, highly cash-generative local pub company, with profits substantially up and debt levels halved," said chief executive Justin Platt.
Marston's will publish its full-year results on 24 November.